What is IR35?
IR35 legislation was brought in to combat tax avoidance. It’s where Contractors, Interims and Consultants supply their services through an intermediary (Ltd. Or Personal Service Company) and carry out the same role as an employee for the Client. In these cases, individuals should be subject to PAYE and National Insurance. The client should also be subject to Employers National Insurance.
What is happening in April 2021?
The legislation is changing. Up until April 2021, the decision as to whether an assignment is inside or outside IR35 sits with the Interim. This also means that any potential HMRC liability is also with the Interim. From April 2021, the Client will be responsible for making the decision as to whether the assignment is inside or outside IR35. This new legislation puts the liability on the fee payer. The fee payer can be the Client or the recruitment agency i.e. whoever pays the Interim.
What this means for You,
as the Client
- If you do nothing, any potential HMRC liability will sit with you.
- You will need to review all your Terms and Conditions to ensure they are compliant with the new legislation.
- You will need to review all Contract for Services to ensure they are also compliant.
- Current and future assignments will need a workplace assessment.
- All assignments after April 2021 will need an SDS (Status Determination Statement).
- You need to understand the factors that will make your decision. You can do this by clicking our IR35 Factors video below. Since making this video in early 2020 the legislation date was pushed back from 2020 to 2021.
Corvin Fox Shield
All of this sounds very daunting, however when you engage your Interims through Corvin Fox, you are automatically protected with Corvin Fox Shield. With Corvin Fox Shield we remove the risk of liability and take on your administration headaches by engaging your Interims through us.
